EUR/USD Bulls Aim for 1.10 - Support Levels to Watch for Dip-Buying Opportunities
The EUR/USD is facing an interesting couple of weeks, starting with the ECB rate decision today.
After that, the nonfarm payrolls report on Friday, the Consumer Price Index on Tuesday, and the FOMC policy decision on March 20 are set to follow.
These macro events should provide a clear directional bias for the EUR/USD and other major FX pairs.
As things stand, it looks like the US dollar may have formed a short-term peak, which could see the EUR/USD rise towards the 1.10 handle and then sell-off.
This week’s focus will be on the European Central Bank’s policy decision, due later today, followed by the US nonfarm payrolls report on Friday.
Before discussing those events and the dollar in greater detail, let’s have a quick look at the EUR/USD chart first.
Wednesday’s selling of the dollar created reversal-like price patterns on several major FX pairs, including the EUR/USD.
This pair has not looked back much ever since dropping below the low of December last month, before squeezing higher.
It has now risen and held above the 200-day average for a few days, too. Meanwhile, the 21-day exponential average has crossed above the 200-day in another bullish sign.
Given the above bullish signals, I would be more inclined to buy dips in the EUR/USD than selling into rallies, a strategy that had worked well at the start of the year.
Key short-term support is seen around 1.0850 to 1.0885ish, which now needs to hold to maintain the bullish bias.
The line in the sand for me is at 1.0795, last week’s low. If the EUR/USD were to break back below that level then that would be a bearish outcome.
So, as things stand, it looks like the EUR/USD is heading towards 1.10 again and potentially higher, than a breakdown. Let’s see if the ECB has
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